Mike Roche has been a Six Park shareholder since 2016, joining the company’s board in December 2017. His love of numbers led him into actuarial studies before he pivoted from superannuation into investment banking. He is a member of the Wesfarmers board and a trustee director of EISS Super. Mike spoke to Six Park head of communication Erika Jonsson about his career, his philanthropic projects and his observations of the financial services industry.
Mike spent 10 years as head of mergers and acquisitions for Deutsche Bank during his 22 years with the company, and he now provides advice to government and private sector clients through his company M R Advisory. He is also a member of the Wesfarmers board and a trustee director of EISS Super. Mike spoke to Six Park head of communication Erika Jonsson about his career, his philanthropic projects and his observations of the financial services industry.
YOU’VE WORKED IN FINANCE FOR MORE THAN 40 YEARS, INCLUDING 22 YEARS AT DEUTSCHE BANK. WHAT PROMPTED YOU TO ENTER THE INDUSTRY?
I always loved maths and its symmetry – I’m an actuary by training so I’ve always been focused on numbers. I worked in that field for nine years for what is now called AXA, starting in Brisbane and then moving down to Sydney, working in corporate super and investment. I was then seconded to a merchant bank that AXA owned and I never looked back. I really just looked for something practical to do with mathematics.
WHAT ARE THE BIGGEST CHANGES YOU’VE SEEN DURING THAT TIME?
The floating of the dollar was a big event for Australia because it opened up the economy. Compulsory super was huge, and effectively what that did was transfer investment risk to the employee when the whole system of defined benefits started the other way around. That was a colossal change. During the 1970s recession, an enormous number of companies went bankrupt and part of my job was talking to retrenched people about what was left. I was meeting people who were 55 or 60 and had to explain to them that they’d not only lost a job but their super was materially lower than they were expecting. That recession was far and away the worst that Australia has had in terms of bankruptcies and impacts on business.
WHAT DO YOU THINK ARE THE BIGGEST CHALLENGES FACING AUSTRALIA’S FINANCIAL SERVICES INDUSTRY, INCLUDING BANKS?
Trust has broken down in the system and that’s a big problem. Financial institutions aren’t trusted like they used to be, yet the strength of Australia’s financial system is what got us through the GFC. That loss of trust will manifest in disruptors challenging the banks and allowing people to go about things in a different way. Part of the problem is that people don’t understand the lingo, they don’t feel equipped to have a conversation; it’s like having a conversation with a mechanic when you have no idea what they’re talking about. That’s why I think Six Park has a big role to play, in taking away the barrier that exists between financial advice and consumers. Younger people have different needs, they want demystification. Rather than waiting to become an expert to invest, which may never happen, Six Park gives you the opportunity to start, to diversify, and to do it without a lot of the biases that affect us all as investors. Diversification is one of the protections against an unknown future. Australians are so concentrated within the Australian market, which creates a big risk.
YOU JOINED THE BOARD OF ONE OF AUSTRALIA’S BIGGEST COMPANIES, WESFARMERS, IN FEBRUARY. WHAT DOES YOUR ROLE INVOLVE?
It’s the opposite of what I spent 40 years doing – my background was giving advice to boards or governments, analysing a problem and instructing them on the solution. Wesfarmers is the opposite of that. Management is the doer, the board is not the doer. Funnily enough, it’s pretty similar to what I do mentoring a young small business owner in Condobolin – it’s about helping them work out the questions they need to think about and how to establish the right culture for success. You’re guiding the ship – checking that the coordinates are right and knowing what other ships are out there. Sometimes I think “I know what the answer to the question is”, but that’s not the point. You will make mistakes in business, everyone does, but your job on a board is to help people avoid colossal mistakes while giving them the greatest potential for success. One of the reasons I wasn’t in a big rush for boards was because I wanted to understand the difference between the role of management and the role of directors. It’s a colossal change.
YOU AND YOUR WIFE GERALDINE CO-FOUNDED SALLY FOUNDATION IN 2013 AS A PHILANTHROPIC FUND SUPPORTING PROJECTS ON THE GROUND IN REGIONAL AUSTRALIA AND ZIMBABWE. WHAT ARE THE MOST REWARDING ASPECTS OF YOUR WORK WITH THE FOUNDATION?
I’d never heard the word charity working in investment banking and it wasn’t really on my radar, but we started to think about a way of using our experience to make a meaningful difference it – what we do, how would we do it. We’re quite hands-on – Sally Foundation doesn’t just hand out money; Geraldine and I have 40 years of experience in separate worlds and Sally is about using that. We work principally with young people because they’re the future; in Australia we’re doing it in regional areas because there’s more support in the city. We want to help people with a bit of a leg up to get to the next stage, and we try to think about the barriers to success and how to take those barriers away. You learn a lot from trying to do that. It’s very rewarding to make a difference – if you can do that, it’s fantastic.
YOU GREW UP IN REGIONAL QUEENSLAND – DO YOU STILL THINK OF YOURSELF AS A COUNTRY PERSON?
I don’t, but I do identify with the characteristics of country people – the resilience and getting on and doing things and self-reliance and self-dependence. The small business owner in Condobolin, 6.5 hours out of Sydney – she is 23 with three-year-old-twins and I remember thinking, how’s she going to open a pizza business that’s always open at night? But she’s incredibly resourceful and she gets on and gets things done. The potential is huge and we need to show respect for that.
EMPOWERMENT IS ALSO AN IMPORTANT THEME OF YOUR WORK WITH MANY RIVERS MICROFINANCE AND ADARA PARTNERS. HOW DID YOU BECOME INVOLVED WITH THESE ORGANISATIONS?
Geraldine suggested I get involved with Many Rivers, which is a one-to-one mentoring situation, and I get a lot out of it because I can see the results. It’s rewarding to share life experience or expertise so others can get exposed to it sooner. Transfer of experience used to happen more naturally, but in a business sense it’s rewarding in both directions. Adara involves working alongside former competitors and keeps me connected and involved. If no-one else benefits from the experience I’ve accumulated, then why did I work so hard? You put a lot into your professional life and that’s probably what led us to start Sally Foundation, without thinking about it in those terms.
WHAT’S THE MOST IMPORTANT LESSON YOU’VE LEARNED IN YOUR LIFE ABOUT MONEY?
Compound interest and saving are the building blocks for financial success – live within your means, and then add the power of compound interest and time to your savings and investments.